Long-lived Collateralized Assets and Bubbles
When infinite-lived agents trade long-lived assets secured by durable goods, equilibrium exists without any additional debt constraints or uniform impatience conditions on agents' characteristics. Also, regardless of whether assets' net supply is positive or zero, price bubbles are absent when physical endowments are uniformly bounded away from zero. Otherwise, bubbles may occur, even for assets in persistently positive net supply and for deflators yielding finite present values of aggregate wealth.
References listed on IDEAS
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"Rational Asset Pricing Bubbles,"
Econometric Society, vol. 65(1), pages 19-58, January.
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- Jean-Michel Grandmont & Yves Younes, 1972. "On the Role of Money and the Existence of a Monetary Equilibrium," Review of Economic Studies, Oxford University Press, vol. 39(3), pages 355-372.
- Mário Páscoa & Myrian Petrassi & Juan Torres-Martínez, 2011. "Fiat money and the value of binding portfolio constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(2), pages 189-209, February.
- Mário Páscoa & Myrian Petrassi & Juan Pablo Torres-Martínez, 2008. "Fiat money and the value of binding portfolio constraints," Working Papers wp283, University of Chile, Department of Economics.
- Mário R. Páscoa & Myrian Petrassi & Juan Pablo Torres-Martínez, 2009. "Fiat Money and the Value of Binding Portfolio Constraints," Working Papers Series 176, Central Bank of Brazil, Research Department.
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- Felix Kubler & Karl Schmedders, 2003. "Stationary Equilibria in Asset-Pricing Models with Incomplete Markets and Collateral," Econometrica, Econometric Society, vol. 71(6), pages 1767-1793, November.
- Felix Kubler & Karl Schmedders, 2001. "Stationary Equilibria in Asset-Pricing Models with Incomplete Markets and Collateral," Discussion Papers 1319, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Hernandez D., Alejandro & Santos, Manuel S., 1996. "Competitive Equilibria for Infinite-Horizon Economies with Incomplete Markets," Journal of Economic Theory, Elsevier, vol. 71(1), pages 102-130, October. Full references (including those not matched with items on IDEAS)
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